DA welcomes Mboweni’s commitment not to use his emergency powers to bailout SAA

The Democratic Alliance (DA) has welcomed Finance Minister Tito Mboweni’s commitment not to use his emergency powers to bailout SAA.

The party is also happy with his assertions that there is no imminent plan to do so.

The DA filed an urgent interdict on Friday in the High Court in Pretoria to stop the government from further funding the airline.

SAA will need more than R10 billion for restructuring.

The DA says it has now removed its urgent application from the court roll. It has, however, retained its application on the normal court roll should the need arise in future, to prevent the Minister from using Section 16 of the Public Finance Management Act for the same purpose.

In a letter sent to the DA, Mboweni says they are looking at other means of funding SAA and could use pension funds to Invest in the airline. The party says it will also be opposing the use of public funds to bailout SAA.

DA says it remains resolute that it would be wrong for SAA to be bailed out once again at the public expense while millions are facing hardships under COVID-19 pandemic.

DA files urgent interdict to halt government from bailing out SAA:

Revamped SAA could be run independently: Gordhan

Debt-ridden SAA has been in a form of bankruptcy protection since December.

Its creditors approved a rescue plan last week that involves scaling down its fleet, shedding thousands of jobs and a commitment of over R10 billion from the government – Public Enterprises Minister Pravin Gordhan said, adding that the new SAA cannot be run by a “bunch of amateurs”.

He did not specify if the revamped airline will be a listed entity.

The government directly holds a 37% stake in the listed entity and state-owned fund manager Public Investment Corp. owns around 15%. The rest is owned by institutional investors and the public.

Gordhan said the government was still trying to secure the 10 billion rand required for the business rescue plan to succeed. “Now where it comes from, what form it comes in is something is still being worked on.”

The Public Enterprises and Finance ministries have committed to finding the funds in a letter to the airline’s administrators seen by Reuters last Thursday. This is in addition to more than R 16 billion the Finance Department set aside in its February budget to repay SAA’s guaranteed debt and debt-service costs.

Gordhan has reiterated that the restructured airline will have a strategic partner, professional aviation managers and a more simplified salary structure.

SAA Business Rescue practitioners notify workers on looming retrenchments: